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Many people want to know if they can be approved to buy a home with an FHA mortgage. And that loan approval can be easier to get than for some conventional loans. But getting approved for the loan is only one part of the process. Do you know the type of loan you will need?

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FHA.com is a privately owned website, is not a government agency, and does not make loans.

What Can I Buy With an FHA Mortgage?

March 26, 2022

What Can I Buy With an FHA Mortgage?
Many people want to know if they can be approved to buy a home with an FHA mortgage. And that loan approval can be easier to get than for some conventional loans. But getting approved for the loan is only one part of the process. Do you know the type of loan you will need?

Borrowers are at a serious disadvantage when they don’t know all your options. Did you know, for example, that you can use an FHA mortgage to buy a house with as many as four living units? You can also choose from a variety of housing types such as manufactured homes or modular homes, or even condominium units.

There are also some issues you should know about regarding the things you cannot use an FHA loan to purchase, as we’ll discover below.

Fixer-Uppers, “REO Homes” and Foreclosed Homes

Did you know it may be possible to buy a foreclosed home using an FHA 203(k) Rehabilitation loan to bring the property up to code and minimum standards? FHA loans can help you buy a fixer-upper home in the same way.

Tiny Houses

You may find the purchase of a tiny home with a government-backed mortgage to be rather challenging. These houses often have no comparables to review them alongside in the housing market and that makes an appraisal much harder to do properly. You may find lenders won’t consider a tiny home for an FHA mortgage.

FHA Loans for Multi-Unit Homes

An FHA loan can be approved for purchases of homes with between one and four living units. Multi-unit properties must be primarily residential and your loan must be for a house where you plan to live as your primary residence.

Duplexes and townhomes may be eligible for an FHA mortgage if the property meets minimum standards, the same as a single-bedroom home or a condo.

Mixed-Zoning / Mixed-Use Properties

FHA loan rules for multi-unit properties are also applicable for mixed-use and mixed-zoning options. The property must be primarily residential--you will be buying a home and not a business. Any non-residential use of the home must not interfere with using the structure primarily as a home.

Manufactured Homes

You can buy manufactured homes, modular homes, and similar properties through the FHA loan program. There are some minimum requirements including size and age, and FHA loan rules state the home must be placed on an approved permanent foundation as a condition of loan approval. FHA loans for manufactured housing can include loan funds intended to purchase the land the home may be placed upon.

Housing Types That May Not Be Approved

Some types of housing aren’t suitable for FHA loans because they either don’t meet the criteria for a home under the FHA program or the home cannot be taxed or classified as real estate. A houseboat cannot be fixed to a permanent foundation, for example, and does not qualify for an FHA mortgage. The same is true of RVs and similar vehicles.

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